Earlier this month, the Federal Circuit heard oral argument in AliveCor, Inc. v. International Trade Commission, a patent case that attracted seven amicus briefs. In this case the Federal Circuit is reviewing a judgment of the International Trade Commission in a patent infringement dispute between AliveCor, Inc. and Apple Inc. Judges Hughes, Linn, and Stark heard the argument. This is our argument recap.
Sean Pak argued for AliveCor. Pak described AliveCor’s product as “a heart rate sensor, ECG sensor, and an activity sensor” in a smartwatch form factor. Pak explained that AliveCor’s patent dealt with both the hardware and “software that is needed to process . . . single-lead ECG data in order to confirm the presence of arrhythmia at a level that would qualify, for example, for FDA approval.” A judge asked whether it is Pak’s “contention that the administrative law judge effectively construed ‘alert’ broadly enough to cover all calls to action.” This judge continued to ask whether Pan “need[s] that broad of a construction.” Pak confirmed that he needed that broad of a construction and believed that the judge “used that broad of a construction.” A judge then asked about evidence of infringement. Pak pointed to evidence on “Apple’s own” website that directed users on how to use the Apple Watch.
Melanie Bostwick argued for Apple. A judge immediately asked Bostwick what the effect on the current case would be if another case, AliveCor, Inc. v. Apple Inc., were affirmed. Bostwick argued that AliveCor would no longer have a valid patent and that “[t]he right posture. . . is to vacate the ITC’s ruling, that is the final decision, as well as the remedial orders, and remand to the agency with instructions that the complaint be dismissed and the investigation be terminated.” Bostwick then argued, on the merits, that AliveCor’s patents “specify only that the ECG sensor is on the local computer device” but “[t]hey do not specify where or what kind of heart rate or activity sensor is involved in the system.” Bostwick also contended that the “statements on Apple’s website are irrelevant,” because this case concerns only what happens on the watch itself. Bostwick then suggested there was a legal error “in finding the domestic industry requirement met” based on expenses that should not have been included in the relevant analysis, particularly expenses for prototype products. Bostwick also argued that a second legal error involved “allowing tepid evidence of secondary considerations . . . to overcome an undeniably strong prima facie case of obviousness.”
Panyin Hughes argued for the International Trade Commission. Hughes argued that the evidence the Commission relied on for industry praise and copying was “very strong.” He pointed to evidence of cardiologists calling AliveCor’s product “a paradigm shift in cardiac care,” as well as evidence of Apple “meeting with AliveCor’s engineers . . . numerous times.” Hughes also argued that, when analyzing the domestic industry requirement, the Commission focuses on the exploitation of the patented technology, which can include investments into upgrades or future products. One judge then asked how substantial the investment in domestic industry has to be to meet the requirement, or if the ratio of foreign to domestic investment was all that mattered. Hughes explained that the Commission uses a two step analysis that begins with checking if the numbers are substantial in general, before conducting a comparative analysis to see if they are substantial in comparison to foreign investments. Hughes then argued that AliveCor’s construction of “alert” was too broad, suggesting that “the statement must directly instruct or direct a user to take an ECG.”
In rebuttal, Pak maintained that his broad definition of “alert” comports with the plain and ordinary meaning of the word. He further argued that the statements on Apple’s website are relevant because precedent allows examining instruction manuals when analyzing the intended function of a device. A judge then turned the conversation to copying, asking if there was any direct evidence of comparing “software to software or structure to structure.” Pak responded by arguing there was direct evidence of copying in Apple’s own internal presentations, “specifically, mentions of technology integrated into various products from Alivecor.” A judge then asked how the evidence of secondary considerations could overcome a strong prima facie case of obviousness. Pak responded that he did not believe that Apple had a strong prima facie case, and anyway that the “strong industry praise by Apple” weighed strongly in AliveCor’s favor.
During her rebuttal, Bostwick maintained there was no legal basis for crediting spending on “future not-yet-existing products to support a domestic industry in a different discontinued product.” A judge then asked if strong evidence of copying could overcome a prima facie case. Bostwick responded by arguing that the evidence of copying was not strong, suggesting too that the administrative law judge did not rely on “supposed praise from Apple” nor evidence of Apple having meetings with AliveCor engineers.
We will continue to monitor this case and report on developments.